Green Dot Reports First Quarter 2022 Results

Increases 2022 Guidance

Executes $25M Accelerated Share Repurchase

May 05, 2022 04:05 PM Eastern Daylight Time

AUSTIN, Texas--(BUSINESS WIRE)--Green Dot Corporation (NYSE: GDOT) today reported financial results for the quarter ended March 31, 2022.

“We delivered another strong quarter with expanded margins across business segments,” said Dan Henry, CEO of Green Dot. “My confidence in our team and path forward continues to strengthen as we begin realizing the benefits of our transformation to a modern bank and technology platform.”

GAAP financial results for the first quarter of 2022 compared to the first quarter of 2021:

Total operating revenues on a generally accepted accounting principles (GAAP) basis were $400.6 million for the first quarter of 2022, up from $393.5 million for the first quarter of 2021, representing a year-over-year increase of 2%.
GAAP net income was $38.6 million for the first quarter of 2022, compared to a $25.7 million net income for the first quarter of 2021, representing a year-over-year increase of 50%.
GAAP diluted earnings per common share was $0.70 for the first quarter of 2022, compared to a $0.46 diluted earnings per common share for the first quarter of 2021, representing a year-over-year increase of 52%.

Non-GAAP financial results for the first quarter of 2022 compared to the first quarter of 2021:¹

Non-GAAP total operating revenues¹were $394.7 million for the first quarter of 2022, up from $379.8 million for the first quarter of 2021, representing a year-over-year increase of 4%.
Adjusted EBITDA¹ was $90.3 million, or 22.9% of non-GAAP total operating revenues¹ for the first quarter of 2022, compared to $73.4 million, or 19.3% of non-GAAP total operating revenues¹ for the first quarter of 2021, representing a year-over-year increase of 23%.
Non-GAAP net income¹ was $58.6 million for the first quarter of 2022, compared to $46.1 million for the first quarter of 2021, representing a year-over-year increase of 27%.
Non-GAAP diluted earnings per share¹ was $1.06 for the first quarter of 2022, compared to $0.83 for the first quarter of 2021, representing a year-over-year increase of 28%.

Reconciliations of total operating revenues to non-GAAP total operating revenues, net income to adjusted EBITDA, net income to non-GAAP net income, and diluted earnings per share to non-GAAP diluted earnings per share, respectively, are provided in the tables immediately following the unaudited consolidated financial statements. Additional information about the Company's non-GAAP financial measures can be found under the caption “About Non-GAAP Financial Measures” below.

Key Metrics

The following table shows Green Dot's quarterly key business metrics for each of the last five calendar quarters on a consolidated basis and by each of its reportable segments. Please refer to Green Dot’s latest Annual Report on Form 10-K for a description of the key business metrics, as well as additional information regarding how Green Dot organizes its business by segment.

	2022		2021
	Q1		Q4		Q3		Q2		Q1
	(In millions)
Consolidated *
Gross dollar volume	$	17,436	$	16,353	$	16,404	$	17,399	$	20,666
Number of active accounts		4.93		5.07		5.37		6.03		6.35
Purchase volume	$	7,192	$	7,065	$	7,356	$	8,870	$	10,445
Consumer Services
Gross dollar volume	$	6,621	$	6,300	$	6,811	$	8,188	$	10,156
Number of active accounts		3.04		3.10		3.38		3.97		4.07
Direct deposit active accounts		0.69		0.76		0.83		0.92		0.97
Purchase volume	$	5,017	$	4,881	$	5,166	$	6,455	$	7,138
B2B Services
Gross dollar volume	$	10,815	$	10,053	$	9,593	$	9,211	$	10,510
Number of active accounts		1.89		1.97		1.99		2.06		2.28
Purchase volume	$	2,175	$	2,184	$	2,190	$	2,415	$	3,307
Money Movement
Number of cash transfers		8.87		9.95		10.05		10.19		10.32
Number of tax refunds processed		9.61		0.12		0.43		4.15		7.44

Represents the sum of Green Dot's Consumer Services and B2B (as defined herein) Services segments.

Accelerated Share Repurchase Program

Green Dot announced that during the quarter it entered into, and in April it completed, a $25 million accelerated share repurchase program (“ASR”) in conjunction with its previously announced $100 million share repurchase program (the “Program”) authorized by Green Dot’s Board of Directors in February 2022. In total, 914,037 shares were delivered under the ASR at an average price of $27.35 per share.

As of May 5, 2022, approximately $72 million remains available under the Program.

Unencumbered cash at the holding company was $82.0 million as of March 31, 2022.

"We started 2022 off with solid earnings performance as a combination of underlying growth coupled with a focus on cost control and driving efficiency allowed us to deliver revenue and earnings growth despite facing tough comparisons versus last year. With the solid performance in the first quarter we are raising our 2022 guidance while maintaining our ability to invest in our strategic initiatives," said George Gresham, CFO and COO of Green Dot.

Updated 2022 Financial Guidance

Green Dot has provided its updated financial outlook for 2022. Green Dot’s outlook is based on a number of assumptions that management believes are reasonable at the time of this earnings release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in Green Dot's filings with the Securities and Exchange Commission.

Total Non-GAAP Operating Revenues²

Green Dot reaffirms its full year non-GAAP total operating revenues² to be between $1.394 billion and $1.430 billion, or up 2% year-over-year at the mid-point.

Adjusted EBITDA²

Green Dot now expects its full year adjusted EBITDA² to be between $230 million and $240 million, or up 8% year-over-year at the mid-point.

Non-GAAP EPS²

Green Dot now expects its full year non-GAAP EPS² to be between $2.32 and $2.46, or up 8% year-over-year at the mid-point.

The components of Green Dot's non-GAAP EPS² guidance range are as follows:

	Range
	Low			High
	(In millions, except per share data)
Adjusted EBITDA	$	230.0		$	240.0
Depreciation and amortization*		(62.0	)		(62.0	)
Net interest expense		(0.2	)		(0.2	)
Non-GAAP pre-tax income	$	167.8		$	177.8
Tax impact**		(39.4	)		(41.8	)
Non-GAAP net income	$	128.4		$	136.0
Non-GAAP diluted weighted-average shares issued and outstanding		55.3			55.3
Non-GAAP earnings per share	$	2.32		$	2.46

*		Excludes the impact of amortization of acquired intangible assets
**		Assumes a non-GAAP effective tax rate of approximately 23.5% for full year.

For additional information, see reconciliations of forward-looking guidance for these non-GAAP financial measures to their respective, most directly comparable projected GAAP financial measures provided in the tables immediately following the reconciliation of Net Income to Adjusted EBITDA.

Conference Call

Green Dot's management will host a conference call to discuss first quarter 2022 financial results today at 6:00 p.m. ET. The conference call can be accessed live from Green Dot's investor relations website at http://ir.greendot.com/. Green Dot uses this website as a tool to disclose important information about the company to investors and comply with its disclosure obligations under Regulation Fair Disclosure. A replay of the webcast will be available at the same website following the call. The replay will be available until Thursday, May 12, 2022.

Forward-Looking Statements

This earnings release contains forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements in the quotes of its executive officers, its updated 2022 financial guidance, its technology transformation and other future events that involve risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements contained in this earnings release, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from those projected include, among other things, the continuing impact of the COVID-19 pandemic on Green Dot’s business, results of operations and financial condition, the effectiveness of Green Dot’s measures taken in response to the COVID-19 pandemic, changes in the U.S. government’s response to the COVID-19 pandemic, including with respect to stimulus funds and unemployment benefits, shifts in consumer behavior towards electronic payments, the impact of the U.S. presidential administration on, among other things, the regulation of financial institutions and corporate tax rates, inflationary pressures, the timing and impact of revenue growth activities, Green Dot's dependence on revenues derived from Walmart, impact of competition, Green Dot's reliance on retail distributors for the promotion of its products and services, demand for Green Dot's new and existing products and services, continued and improving returns from Green Dot's investments in strategic initiatives, potential difficulties in integrating operations of acquired entities and acquired technologies, Green Dot's ability to operate in a highly regulated environment, including with respect to any restrictions imposed on its business, changes to existing laws or regulations affecting Green Dot's operating methods or economics, Green Dot's reliance on third-party vendors, changes in credit card association or other network rules or standards, changes in card association and debit network fees or products or interchange rates, instances of fraud developments in the prepaid financial services industry that impact prepaid debit card usage generally, business interruption or systems failure, economic, political and other conditions may adversely affect trends in consumer spending and Green Dot's involvement in litigation or investigations. These and other risks are discussed in greater detail in Green Dot's Securities and Exchange Commission filings, including its most recent annual report on Form 10-K and quarterly report on Form 10-Q, which are available on Green Dot's investor relations website at ir.greendot.com and on the SEC website at www.sec.gov. All information provided in this release and in the attachments is as of May 5, 2022, and Green Dot assumes no obligation to update this information as a result of future events or developments.

About Non-GAAP Financial Measures

To supplement Green Dot's consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (GAAP), Green Dot uses measures of operating results that are adjusted for, among other things, non-operating net interest income and expense; other non-interest investment income earned by our bank; income tax benefit and expense; depreciation and amortization, including amortization of acquired intangibles; certain legal settlement gains and charges; stock-based compensation and related employer payroll taxes; changes in the fair value of contingent consideration; transaction costs from acquisitions; amortization attributable to deferred financing costs, impairment charges; extraordinary severance expenses; earnings or losses from equity method investments; changes in the fair value of loans held for sale; commissions and certain processing-related costs associated with Banking as a Service ("BaaS") products and services where Green Dot does not control customer acquisition; other charges and income not reflective of ongoing operating results; and income tax effects. This earnings release includes non-GAAP total operating revenues, adjusted EBITDA, non-GAAP net income, and non-GAAP diluted earnings per share. These non-GAAP financial measures are not calculated or presented in accordance with, and are not alternatives or substitutes for, financial measures prepared in accordance with GAAP, and should be read only in conjunction with Green Dot's financial measures prepared in accordance with GAAP. Green Dot's non-GAAP financial measures may be different from similarly-titled non-GAAP financial measures used by other companies. Green Dot believes that the presentation of non-GAAP financial measures provides useful information to management and investors regarding underlying trends in its consolidated financial condition and results of operations. Green Dot's management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate Green Dot's business and make operating decisions. For additional information regarding Green Dot's use of non-GAAP financial measures and the items excluded by Green Dot from one or more of its historic and projected non-GAAP financial measures, investors are encouraged to review the reconciliations of Green Dot's historic and projected non-GAAP financial measures to the comparable GAAP financial measures, which are attached to this earnings release, and which can be found by clicking on “Financial Information” in the Investor Relations section of Green Dot's website at http://ir.greendot.com/.

About Green Dot

Green Dot Corporation (NYSE: GDOT) is a financial technology and registered bank holding company committed to giving all people the power to bank seamlessly, affordably, and with confidence. Green Dot’s technology platform enables it to build products and features that address the most pressing financial challenges of consumers and businesses, transforming the way they manage and move money and making financial empowerment more accessible for all.

Green Dot offers a broad set of financial services to consumers and businesses including debit, checking, credit, prepaid, and payroll cards, as well as robust money processing services, tax refunds, cash deposits and disbursements. Its flagship digital banking platform GO2bank offers consumers simple and accessible mobile banking designed to help improve financial health over time. The company’s banking platform services business enables a growing list of the world’s largest and most trusted consumer and technology brands to deploy customized, seamless, value-driven money management solutions for their customers.

Founded in 1999, Green Dot has served more than 33 million customers directly and many millions more through its partners. The Green Dot Network of more than 90,000 retail distribution locations nationwide, more than all remaining bank branches in the U.S. combined, enables it to operate primarily as a “branchless bank.” Green Dot Bank is a subsidiary of Green Dot Corporation and member of the FDIC. For more information about Green Dot’s products and services, please visit www.greendot.com.

GREEN DOT CORPORATION CONSOLIDATED BALANCE SHEETS

	March 31, 2022			December 31, 2021
	(unaudited)
Assets	(In thousands, except par value)
Current assets:
Unrestricted cash and cash equivalents	$	1,320,743		$	1,322,319
Restricted cash		5,899			3,321
Settlement assets		500,258			320,377
Accounts receivable, net		68,600			80,401
Prepaid expenses and other assets		65,916			81,380
Income tax receivable		—			1,354
Total current assets		1,961,416			1,809,152
Investment securities available-for-sale, at fair value		2,168,888			2,115,501
Loans to bank customers, net of allowance for loan losses of $9,058 and $5,555 as of March 31, 2022 and December 31, 2021, respectively		24,663			19,270
Prepaid expenses and other assets		203,674			136,400
Property, equipment, and internal-use software, net		139,308			135,341
Operating lease right-of-use assets		10,305			10,967
Deferred expenses		11,068			16,855
Net deferred tax assets		49,105			15,048
Goodwill and intangible assets		460,130			466,943
Total assets	$	5,028,557		$	4,725,477
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	66,605		$	51,353
Deposits		3,605,722			3,286,889
Obligations to customers		214,587			124,221
Settlement obligations		506			15,682
Amounts due to card issuing banks for overdrawn accounts		479			513
Other accrued liabilities		109,200			128,294
Operating lease liabilities		5,832			6,918
Deferred revenue		20,167			28,903
Income tax payable		10,919			291
Total current liabilities		4,034,017			3,643,064
Other accrued liabilities		3,239			3,531
Operating lease liabilities		7,357			8,209
Total liabilities		4,044,613			3,654,804

Stockholders’ equity:
Class A common stock, $0.001 par value; 100,000 shares authorized as of March 31, 2022 and December 31, 2021; 54,293 and 54,868 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		54			55
Additional paid-in capital		388,299			401,055
Retained earnings		737,994			699,370
Accumulated other comprehensive loss		(142,403	)		(29,807	)
Total stockholders’ equity		983,944			1,070,673
Total liabilities and stockholders’ equity	$	5,028,557		$	4,725,477

GREEN DOT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended March 31,
	2022		2021
	(In thousands, except per share data)
Operating revenues:
Card revenues and other fees	$	212,828	$	186,012
Cash processing revenues		100,028		90,915
Interchange revenues		78,856		111,226
Interest income, net		8,905		5,333
Total operating revenues		400,617		393,486
Operating expenses:
Sales and marketing expenses		83,526		118,903
Compensation and benefits expenses		66,264		74,967
Processing expenses		112,092		97,669
Other general and administrative expenses		87,143		67,962
Total operating expenses		349,025		359,501
Operating income		51,592		33,985
Interest expense, net		87		37
Other expense, net		770		1,086
Income before income taxes		50,735		32,862
Income tax expense		12,111		7,127
Net income	$	38,624	$	25,735

Basic earnings per common share:	$	0.70	$	0.47
Diluted earnings per common share:	$	0.70	$	0.46
Basic weighted-average common shares issued and outstanding:		54,556		53,651
Diluted weighted-average common shares issued and outstanding:		55,230		55,068

GREEN DOT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended March 31,
	2022			2021
	(In thousands)
Operating activities
Net income	$	38,624		$	25,735
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, equipment and internal-use software		13,804			13,200
Amortization of intangible assets		6,517			6,944
Provision for uncollectible overdrawn accounts from purchase transactions		4,700			2,994
Provision for loan losses		10,499			1,410
Stock-based compensation		14,858			17,237
Losses in equity method investments		1,708			875
Amortization of (discount) premium on available-for-sale investment securities		(290	)		659
Impairment of long-lived assets		2,263			—
Other		(583	)		42
Changes in operating assets and liabilities:
Accounts receivable, net		7,101			(11,515	)
Prepaid expenses and other assets		13,306			(1,786	)
Deferred expenses		5,787			6,091
Accounts payable and other accrued liabilities		(4,430	)		20,201
Deferred revenue		(8,934	)		(7,159	)
Income tax receivable/payable		12,023			7,169
Other, net		(1,311	)		(1,425	)
Net cash provided by operating activities		115,642			80,672

Investing activities
Purchases of available-for-sale investment securities		(288,958	)		(95,332	)
Proceeds from maturities of available-for-sale securities		86,106			34,364
Proceeds from sales and calls of available-for-sale securities		2,875			5,198
Payments for acquisition of property and equipment		(19,010	)		(10,474	)
Net changes in loans		(14,693	)		(6,488	)
Investment in TailFin Labs, LLC		(35,000	)		(35,000	)
Purchases of other investments		(31,934	)		—
Other investing activities		—			(529	)
Net cash used in investing activities		(300,614	)		(108,261	)

Financing activities
Borrowings on revolving line of credit		50,000			—
Repayments on revolving line of credit		(50,000	)		—
Proceeds from exercise of options and ESPP purchases		92			1,780
Taxes paid related to net share settlement of equity awards		(2,707	)		(8,551	)
Net changes in deposits		318,280			859,868
Net changes in settlement assets and obligations to customers		(104,691	)		395,482
Contingent consideration payments		—			(1,000	)
Repurchase of Class A common stock		(25,000	)		—
Net cash provided by financing activities		185,974			1,247,579

Net increase in unrestricted cash, cash equivalents and restricted cash		1,002			1,219,990
Unrestricted cash, cash equivalents and restricted cash, beginning of period		1,325,640			1,496,701
Unrestricted cash, cash equivalents and restricted cash, end of period	$	1,326,642		$	2,716,691

Cash paid for interest	$	180		$	84
Cash refund from income taxes	$	(11	)	$	(20	)

Reconciliation of unrestricted cash, cash equivalents and restricted cash at end of period:
Unrestricted cash and cash equivalents	$	1,320,743		$	2,711,791
Restricted cash		5,899			4,900
Total unrestricted cash, cash equivalents and restricted cash, end of period	$	1,326,642		$	2,716,691

GREEN DOT CORPORATION REPORTABLE SEGMENTS (UNAUDITED)

	Three Months Ended March 31,
	2022			2021
Segment Revenue	(In thousands)
Consumer Services	$	158,757		$	184,341
B2B Services		133,900			105,975
Money Movement Services		97,316			90,367
Corporate and Other		4,705			(878	)
Total segment revenues		394,678			379,805
BaaS commissions and processing expenses (8)		6,512			13,681
Other income (9)		(573	)		—
Total operating revenues	$	400,617		$	393,486

	Three Months Ended March 31,
	2022			2021
Segment Profit	(In thousands)
Consumer Services	$	54,288		$	53,527
B2B Services		22,264			17,533
Money Movement Services		61,460			48,814
Corporate and Other		(47,686	)		(46,514	)
Total segment profit *		90,326			73,360

Reconciliation to income before income taxes
Depreciation and amortization of property, equipment and internal-use software		13,804			13,200
Stock based compensation and related employer taxes		15,169			17,182
Amortization of acquired intangible assets		6,517			6,944
Impairment charges		2,263			—
Other expense		981			2,049
Operating income		51,592			33,985
Interest expense, net		87			37
Other expense, net		770			1,086
Income before income taxes	$	50,735		$	32,862

Total segment profit is also referred to herein as adjusted EBITDA in its non-GAAP measures. Additional information about the Company's non-GAAP financial measures can be found under the caption “About Non-GAAP Financial Measures."

Green Dot's segment reporting is based on how its Chief Operating Decision Maker (“CODM”) manages its businesses, including resource allocation and performance assessment. Its CODM (who is the Chief Executive Officer) organizes and manages the business primarily on the basis of the channels in which its product and services are offered and uses net revenue and segment profit to assess profitability. Segment profit reflects each segment's net revenue less direct costs, such as sales and marketing expenses, processing expenses, third-party call center support and transaction losses. Green Dot’s operations are aggregated amongst three reportable segments: 1) Consumer Services, 2) Business to Business ("B2B") Services and 3) Money Movement Services.

The Corporate and Other segment primarily consists of net interest income and certain other investment income earned by its bank, eliminations of intersegment revenues and expenses, unallocated corporate expenses, and other costs that are not considered when management evaluates segment performance, such as salaries, wages and related benefits for our employees, professional service fees, software licenses, telephone and communication costs, rent and utilities, and insurance. Non-cash expenses such as stock-based compensation, depreciation and amortization of long-lived assets, impairment charges and other non-recurring expenses that are not considered by our CODM when evaluating our overall consolidated financial results are excluded from our unallocated corporate expenses. Green Dot does not evaluate performance or allocate resources based on segment asset data, and therefore such information is not presented.

GREEN DOT CORPORATION Reconciliation of Total Operating Revenues to Non-GAAP Total Operating Revenues ⁽¹⁾(Unaudited)

	Three Months Ended March 31,
	2022			2021
	(In thousands)
Total operating revenues	$	400,617		$	393,486
BaaS commissions and processing expenses (8)		(6,512	)		(13,681	)
Other income (9)		573			—
Non-GAAP total operating revenues	$	394,678		$	379,805

Reconciliation of Net Income to Non-GAAP Net Income ⁽¹⁾(Unaudited)

	Three Months Ended March 31,
	2022			2021
	(In thousands, except per share data)
Net income	$	38,624		$	25,735
Stock-based compensation and related employer payroll taxes (3)		15,169			17,182
Amortization of acquired intangible assets (4)		6,517			6,944
Change in fair value of contingent consideration (4)		300			—
Transaction and related acquisition costs (4)		413			—
Amortization of deferred financing costs (5)		36			42
Impairment charges (5)		2,263			—
Legal settlement (gain) expenses (5)		(426	)		10
Losses in equity method investments (5)		1,708			875
Change in fair value of loans held for sale (2)(5)		(552	)		—
Extraordinary severance expenses (6)		121			2,015
Other expense, net (5)		187			235
Income tax effect (7)		(5,783	)		(6,958	)
Non-GAAP net income	$	58,577		$	46,080
Diluted earnings per common share
GAAP	$	0.70		$	0.46
Non-GAAP	$	1.06		$	0.83

Diluted weighted-average common shares issued and outstanding
GAAP		55,230			55,068
Non-GAAP		55,501			55,664

Reconciliation of GAAP to Non-GAAP Diluted Weighted-Average Shares Issued and Outstanding (Unaudited)

	Three Months Ended March 31,
	2022	2021
	(In thousands)
Diluted weighted-average shares issued and outstanding	55,230	55,068
Weighted-average unvested Walmart restricted shares (10)	271	596
Non-GAAP diluted weighted-average shares issued and outstanding	55,501	55,664

GREEN DOT CORPORATION Supplemental Detail on Non-GAAP Diluted Weighted-Average Common Shares Issued and Outstanding (Unaudited)

	Three Months Ended March 31,
	2022	2021
	(In thousands)
Class A common stock outstanding as of March 31:	54,293	54,389
Weighting adjustment	534	(142	)
Dilutive potential shares:
Stock options	214	514
Service based restricted stock units	198	523
Performance-based restricted stock units	233	361
Employee stock purchase plan	29	19
Non-GAAP diluted weighted-average shares issued and outstanding	55,501	55,664

Reconciliation of Net Income to Adjusted EBITDA ⁽¹⁾(Unaudited)

	Three Months Ended March 31,
	2022			2021
	(In thousands)
Net income	$	38,624		$	25,735
Interest expense, net (2)		87			37
Income tax expense		12,111			7,127
Depreciation and amortization of property, equipment and internal-use software (2)		13,804			13,200
Stock-based compensation and related employer payroll taxes (2)(3)		15,169			17,182
Amortization of acquired intangible assets (2)(4)		6,517			6,944
Change in fair value of contingent consideration (2)(4)		300			—
Transaction and related acquisition costs (2)(4)		413			—
Impairment charges (2)(5)		2,263			—
Legal settlement (gain) expenses (2)(5)		(426	)		10
Losses in equity method investments (2)(5)		1,708			875
Change in fair value of loans held for sale (2)(5)		(552	)		—
Extraordinary severance expenses (2)(6)		121			2,015
Other expense, net (2)(5)		187			235
Adjusted EBITDA	$	90,326		$	73,360

Non-GAAP total operating revenues	$	394,678		$	379,805
Adjusted EBITDA/Non-GAAP total operating revenues (adjusted EBITDA margin)		22.9	%		19.3	%

GREEN DOT CORPORATION Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to Projected GAAP Total Operating Revenues ⁽¹⁾(Unaudited)

	FY 2022
	Range
	Low			High
	(In millions)
Total operating revenues	$	1,422		$	1,460
Adjustments (8)(9)		(28	)		(30	)
Non-GAAP total operating revenues	$	1,394		$	1,430

Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to Projected GAAP Net Income ⁽¹⁾(Unaudited)

	FY 2022
	Range
	Low			High
	(In millions)
Net income	$	56.6		$	64.2
Adjustments (11)		173.4			175.8
Adjusted EBITDA	$	230.0		$	240.0

Non-GAAP total operating revenues	$	1,430		$	1,394
Adjusted EBITDA / Non-GAAP total operating revenues (Adjusted EBITDA margin)		16.1	%		17.2	%

Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to Projected GAAP Net Income and GAAP Diluted Weighted-Average Shares Issued and Outstanding ⁽¹⁾(Unaudited)

	FY 2022
	Range
	Low		High
	(In millions, except per share data)
Net income	$	56.6	$	64.2
Adjustments (11)		71.8		71.8
Non-GAAP net income	$	128.4	$	136.0
Diluted earnings per share
GAAP	$	1.03	$	1.17
Non-GAAP	$	2.32	$	2.46

Diluted weighted-average shares issued and outstanding
GAAP		55.1		55.1
Weighted-average unvested Walmart restricted shares (10)		0.2		0.2
Non-GAAP		55.3		55.3

(1)		To supplement Green Dot’s consolidated financial statements presented in accordance with GAAP, Green Dot uses measures of operating results that are adjusted to exclude various, primarily non-cash, expenses and charges. These financial measures are not calculated or presented in accordance with GAAP and should not be considered as alternatives to or substitutes for operating revenues, operating income, net income or any other measure of financial performance calculated and presented in accordance with GAAP. These financial measures may not be comparable to similarly-titled measures of other organizations because other organizations may not calculate their measures in the same manner as Green Dot does. These financial measures are adjusted to eliminate the impact of items that Green Dot does not consider indicative of its core operating performance. You are encouraged to evaluate these adjustments and the reasons Green Dot considers them appropriate.
		Green Dot believes that the non-GAAP financial measures it presents are useful to investors in evaluating Green Dot’s operating performance for the following reasons:
		Green Dot records stock-based compensation from period to period, and recorded stock-based compensation expenses and related employer payroll taxes, net of forfeitures, of approximately $15.2 million and $17.2 million for the three months ended March 31, 2022 and 2021, respectively. By comparing Green Dot’s adjusted EBITDA, non-GAAP net income and non-GAAP diluted earnings per share in different historical periods, investors can evaluate Green Dot’s operating results without the additional variations caused by stock-based compensation expense and related employer payroll taxes, which may not be comparable from period to period due to changes in the fair market value of Green Dot’s Class A common stock (which is influenced by external factors like the volatility of the public markets and the financial performance of Green Dot’s peers) and is not a key measure of Green Dot’s operations;
		adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items, such as non-operating net interest income and expense, income tax benefit and expense, depreciation and amortization, stock-based compensation and related employer payroll taxes, changes in the fair value of contingent consideration, transaction costs, impairment charges, extraordinary severance expenses, certain legal settlement charges, earnings or losses from equity method investments, changes in the fair value of loans held for sale, and other charges and income that can vary substantially from company to company depending upon their respective financing structures and accounting policies, the book values of their assets, their capital structures and the methods by which their assets were acquired; and
		securities analysts use adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies.
		Green Dot’s management uses the non-GAAP financial measures:
		as measures of operating performance, because they exclude the impact of items not directly resulting from Green Dot’s core operations;
		for planning purposes, including the preparation of Green Dot’s annual operating budget;
		to allocate resources to enhance the financial performance of Green Dot’s business;
		to evaluate the effectiveness of Green Dot’s business strategies;
		to establish metrics for variable compensation; and
		in communications with Green Dot’s board of directors concerning Green Dot’s financial performance.
		Green Dot understands that, although adjusted EBITDA and other non-GAAP financial measures are frequently used by investors and securities analysts in their evaluations of companies, these measures have limitations as an analytical tool, and you should not consider them in isolation or as substitutes for an analysis of Green Dot’s results of operations as reported under GAAP. Some of these limitations are:
		that these measures do not reflect Green Dot’s capital expenditures or future requirements for capital expenditures or other contractual commitments;
		that these measures do not reflect changes in, or cash requirements for, Green Dot’s working capital needs;
		that these measures do not reflect non-operating interest expense or interest income;
		that these measures do not reflect cash requirements for income taxes;
		that, although depreciation and amortization are non-cash charges, the assets being depreciated or amortized will often have to be replaced in the future, and these measures do not reflect any cash requirements for these replacements; and
		that other companies in Green Dot’s industry may calculate these measures differently than Green Dot does, limiting their usefulness as comparative measures.
(2)		Green Dot does not include any income tax impact of the associated non-GAAP adjustment to adjusted EBITDA, as the case may be, because each of these adjustments to the non-GAAP financial measure is provided before income tax expense.
(3)		This expense consists primarily of expenses for restricted stock units (including performance-based restricted stock units), performance-based stock options and related employer payroll taxes. Stock-based compensation expense is not comparable from period to period due to changes in the fair market value of Green Dot’s Class A common stock (which is influenced by external factors like the volatility of public markets and the financial performance of Green Dot’s peers) and is not a key measure of Green Dot’s operations. Green Dot excludes stock-based compensation expense from its non-GAAP financial measures primarily because it consists of non-cash expenses that Green Dot does not believe are reflective of ongoing operating results. Green Dot also believes that it is not useful to investors to understand the impact of stock-based compensation to its results of operations. Further, the related employer payroll taxes are dependent upon volatility in Green Dot's stock price, as well as the timing and size of option exercises and vesting of restricted stock units, over which Green Dot has limited to no control. This expense is included as a component of compensation and benefits expenses on Green Dot's consolidated statements of operations.
(4)		Green Dot excludes certain income and expenses that are the result of acquisitions. These acquisition-related adjustments include items such as transaction costs, the amortization of acquired intangible assets, changes in the fair value of contingent consideration, settlements of contingencies established at time of acquisition and other acquisition related charges, such as integration charges and professional and legal fees, which result in Green Dot recording expenses or fair value adjustments in its GAAP financial statements. Green Dot analyzes the performance of its operations without regard to these adjustments. In determining whether any acquisition-related adjustment is appropriate, Green Dot takes into consideration, among other things, how such adjustments would or would not aid in the understanding of the performance of its operations. These items are included as a component of other general and administrative expenses on Green Dot's consolidated statements of operations, as applicable for the periods presented.
(5)		Green Dot excludes certain income and expenses that are not reflective of ongoing operating results. It is difficult to estimate the amount or timing of these items in advance. Although these events are reflected in Green Dot's GAAP financial statements, Green Dot excludes them in its non-GAAP financial measures because Green Dot believes these items may limit the comparability of ongoing operations with prior and future periods. These adjustments include items such as amortization attributable to deferred financing costs, impairment charges related to long-lived assets, earnings or losses from equity method investments, legal settlement expenses, changes in the fair value of loans held for sale, and other income and expenses, as applicable for the periods presented. In determining whether any such adjustment is appropriate, Green Dot takes into consideration, among other things, how such adjustments would or would not aid in the understanding of the performance of its operations. Each of these adjustments, except for amortization of deferred financing costs, earnings and losses from equity method investments, and fair value changes on loans held for sale, which are all included below operating income, are included within other general and administrative expenses on Green Dot's consolidated statements of operations.
(6)		During the three months ended March 31, 2022, Green Dot recorded charges of $0.1 million related to extraordinary severance expenses, which were paid out in connection with reductions in force and other involuntary terminations of employment. Although severance expenses may arise throughout the fiscal year, the nature of these costs are not indicative of its core operating performance. This expense is included as a component of compensation and benefits expenses on Green Dot's consolidated statements of operations.
(7)		Represents the tax effect for the related non-GAAP measure adjustments using Green Dot's year to date non-GAAP effective tax rate. It also excludes both the impact of excess tax benefits related to stock-based compensation and the IRC §162(m) limitation that applies to performance-based restricted stock units and stock options expense as of March 31, 2022.
(8)		Represents commissions and certain processing-related costs associated with BaaS products and services where Green Dot does not control customer acquisition. This adjustment is netted against Green Dot's B2B Services revenues when evaluating segment performance.
(9)		Represents other non-interest investment income earned by our bank. This amount is included along with operating interest income in our Corporate and Other segment since the yield earned on these investments are generated on a recurring basis and earned similarly to its investment securities available for sale.
(10)		Represents the weighted average of the unvested balance of restricted shares issued to Walmart in January 2020. Walmart is entitled to voting rights and participate in any dividends paid on the unvested balance and therefore, the shares are included in the computation of non-GAAP diluted earnings per share.
(11)		These amounts represent estimated adjustments for items such as non-operating net interest income, income taxes, depreciation and amortization, employee stock-based compensation and related employer taxes, changes in the fair value of contingent consideration, transaction costs from acquisitions, amortization attributable to deferred financing costs, impairment charges, extraordinary severance expenses, earnings and losses from equity method investments, changes in the fair value of loans held for sale, legal settlement gains and expenses and other income and expenses. Employee stock-based compensation expense includes assumptions about the future fair value of the Company’s Class A common stock (which is influenced by external factors like the volatility of public markets and the financial performance of the Company’s peers).

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